The White House Office of Management and Budget (OMB) has been employing a strategic approach to control federal funds, particularly those allocated by Congress. Since 2025, OMB has been using its authority under the Antideficiency Act to withhold funds from agencies and programs that the Trump administration disfavors. This strategy involves delaying access to funds by designating them as "unallocated" and conditioning their release on OMB's approval of detailed "spend plans."
One of the less publicized tactics OMB has employed is the use of Category C, which sets aside funds for future fiscal years. By apportioning funds in Category C, OMB can block agencies from spending them in the current year unless OMB provides otherwise. This approach has been increasingly used by OMB, both numerically and as a percentage of total apportionments, particularly under the second Trump administration.
The increase in Category C usage is attributed to the enactment of President Trump's One Big Beautiful Bill Act (OBBBA) and the expansion of Category C to 64 budgetary accounts. OMB's management of OBBBA funds through Category C allows for a slow release of funds, including to agencies like the Department of Defense and NASA. This tactic also raises questions about the administration's approach to managing funds, as it deviates from the previous administration's practices.
The use of Category C has implications for both the executive branch and Congress. It allows OMB to micromanage funds and agencies, potentially influencing policy execution. However, it also raises concerns about OMB's control over appropriations and the potential violation of congressional spending directives. The Antideficiency Act and the Impoundment Control Act impose restrictions on OMB's ability to withhold funds, and OMB must report such withholdings to Congress.
The analysis of OMB's apportionment data reveals various uses of Category C, including cuts, delays, and wind-down measures. Some accounts have seen significant increases in Category C withholdings, such as the Council of the Inspectors General on Integrity and Efficiency and the Department of Commerce's Digital Equity account. These increases have sparked legal challenges and calls for congressional reform to specify apportionment rules and protect against unilateral executive actions.
In conclusion, OMB's use of Category C highlights the complex dynamics between the executive branch and Congress in managing federal funds. It underscores the need for careful scrutiny and potential reforms to ensure a balanced approach to appropriations and executive discretion.
